Understanding Money Laundering and Ways to Stop It

Wikipedia defines Money laundering as, "the process of concealing the source of money obtained by illicit means. The methods by which money may be laundered are varied and can range in sophistication.

Many regulatory and governmental authorities quote estimates each year for the amount of money laundered, either worldwide or within their national economy. In 1996 the International Monetary Fund estimated that two to five percent of the worldwide global economy involved laundered money."

So, we can safely assume that aml compliance program is all-pervasive and is not limited to one specific country or continent. There have been numerous rules and regulations around to stop money laundering and punish those who are found to be involved in money laundering.

However, it's difficult to even for financial institutions to detect transactions that may involve money derived from illicit means. But, as they say,, where there is a will, there is a way; in this situation, there is anti-money laundering software that really helps in detecting suspicious activities.

It's strange to see that even after the constant rise of money laundering cases, a large number of financial institutions are still operating without anti-money laundering systems or software. The need of the hour is to equip banks and other financial institutions with fraud management solutions.

Money laundering is dangerous not just for financial institutions, but for the global economy as well. And, therefore, adequate steps must be taken to curb the very practice of anti-money laundering and nab those who are found involved in such illicit activities.

For this, law authorities need to come out with strict laws and implementation of those laws; institutions, on the other hand, should equip themselves with the most-updated anti-money laundering software/systems to detect the very presence of any suspicious activity so the same can be reported to the concerned authority.